The Working Group on Tourism for the 12th Five Year Plan clearly states that the availability of good infrastructure is one of the essential requirements for attracting more tourists, both international and domestic, to any tourist destination. The creation of tourism infrastructure has had its multiplier effect in terms of overall economic growth and employment generation vis-à-vis investment and the preservation of art, culture and heritage. Tourism projects in underdeveloped areas have helped in the creation of roads, telecommunication and medical facilities, among others. According to the Approach Paper of the 12th Five Year Plan, the total requirement of funds for various infrastructure developments for tourism during 2012-17 will be Rs 16,180 crores. The approach paper of the 12th Plan clearly states that country’s huge, barely tapped tourism potential is dependent upon inadequate transport infrastructure and accommodation, among others.
As infrastructure plays a key role in the development of tourism, the Union Ministry of Tourism and State Tourism Boards have been making efforts to develop quality tourism infrastructure at tourist destinations and circuits. “The Ministry of Tourism (MoT) has sanctioned Rs. 4090.31 crores for a total number of 1226 tourism projects, which includes projects relating to product/ infrastructure development for destinations and circuits, Human Resource Development, fairs and festivals and adventure and rural tourism for infrastructure augmentation in 2013,” the MoT said. The Ministry has launched a scheme for the development of nationally and internationally important destinations and circuits through mega projects. “So far, 71 mega projects have already been identified, out of which 53 projects have been sanctioned till September 2013. The mega projects are a judicious mix of culture, heritage, spiritual and ecotourism in order to give tourists a holistic perspective,” the Ministry said.
Parvez Dewan, Secretary, Ministry of Tourism, Govt. of India, said that India has managed to maintain its tourism infrastructure and services even within limited resources. He stressed upon the aspect of overcoming “0.6 per cent total tourist arrivals paradox” which is lingering over the sector’s growth story in spite of the rich history of India. According to him, some of the areas of concern for which collective action is needed are India’s image issue, visa regime, cleanliness, poverty, security, and over population. He said that, due to the efforts of the government, 83 per cent of visas to visit India are being issued within three days. The country has also recorded 19 per cent growth in domestic tourism during the last year, and 4.1 per cent growth in India’s inbound tourists in 2013 – numbers higher than the world average.
FDI in Tourism
In order to stimulate domestic and international investments in the tourism sector, the Government of India allows 100 per cent foreign direct investment (FDI) in its tourism industry for the construction of hotels and similar projects and operations, which includes airport expansion projects (subject to the approval of the Foreign Investment Promotion Board (FIPB). The FDI inflows in hotel and tourism sector during April 2000 to November 2013 stood at US$ 6,825 million, as per the data released by Department of Industrial Policy and Promotion (DIPP).
States gear up to boost infrastructure
While the Union Tourism Ministry’s focus is to develop tourism infrastructure across the country, State Tourism Boards have also geared up to strengthen tourism infrastructure in their states to offer better facilities in order to draw more tourists. The Southern state of Karnataka has already embarked on a new journey towards this goal. The Karnataka Tourism Vision Group, which was set up by the State Tourism Minister R V Deshpande, recently recommended an investment of Rs. 73,000 crores in the next 10 years to make state the most sought-after tourist destination in the country. The Group suggested the upgradation of the existing tourist infrastructure, creating new tourist assets through public private partnership, and tapping the potential in adventure, medical and spiritual tourism in the state.
Deshpande also revealed that the state is looking at private investment in the sector. “We have received private investment in every sector. We are looking at wooing private investment to develop tourism infrastructure in the state. We are willing to invite investors to run government-owned tourism properties that are not profit making,” Deshpande said, adding that governments have no business running businesses.
Andhra Pradesh Tourism has also accelerated its efforts to strengthen existing tourism infrastructure in addition to building new ones. The State Tourism Board is eyeing an investment of over Rs. 1,000 crores through PPP to upgrade tourism infrastructure. “We are looking at developing coastal corridors along the Vizag-Bheemunipatnam sea front and Vizag-Vizianagaram- Srikakulam Regional circuit with Rs. 175 crores investment, and eight new beach properties in Srikakulam, Vizianagaram, East Godavari, West Godavari, Prakasam and Nellore districts. We are sure that the new tourism infrastructure will delight new-generation visitors. We are keen to promote Andhra Pradesh as the most desirable round-the-year tourist destination in India,” Chandana Khan, Special Chief Secretary to the Andhra Pradesh Government (Tourism and Archaeology) and Chairman and Managing Director, APTDC said, on the sidelines of the CII Tourism Conclave.
Kerala, which is already established as a major destination in the country, is also putting a lot of focus on tourism infrastructure. In its recent Budget, the government announced plans to set up a Sea Life Leisure Park at Varkala for which Rs. 10 lakhs has been set apart for the preliminary works. The government has also proposed an upgrade of the Neyyar Dam region into a Tourist Destination Centre.
Goa is also looking at upgrading infrastructure and other related facilities to put Goa on par with any other world-class destination. The State Tourism Board has already announced the construction of a tourism jetty, multi-level car parking, Baga beach beautification project and tourist information plaza development.
“There are 28 projects in all which are scheduled for completion over the next three years. Our aim is to make Goa the number one destination for vacationing all over the world. Apart from promoting just leisure we are also looking at improving and promoting MICE facilities in the state as Goa has tremendous growth potential in this sector as well. Upgrading our infrastructure to good quality standards and maintaining this will be a big step forward for us. In addition, we are optimistic that facilities such as the new airport terminal will help us realise our vision,” Dilip Parulekar, Tourism Minister for Goa, said.
Maharashtra, the neighbouring state of Goa, has also charted out the roadmap to develop tourism infrastructure across the state. “We have taken a slew of initiatives to develop proper tourism infrastructure in the state. We are developing infrastructure at the heritage circuit of Aurangabad, wildlife safaris around Nagpur, and beach tourism in the Konkan region. We have better transportation in terms of four-lane roads, international airports and an extensive railway network. Basing on these, we want to enhance tourism infrastructure,” Dr. Jagdish Patil, Managing Director, Maharashtra Tourism Development Corporation, said.
The Corporation is also developing Sea World India, Asia’s largest marine world and Water Park at Sindhudurg. Moreover, they are developing a scuba diving and snorkelling institute at Tarkarli, he informed. MTDC is preparing a master plan for the next 10 years for developing tourism infrastructure at most of the tourism sites in the state. “One of the best examples of private participation in a mega project is the water-based theme park. We are acquiring 1200 acres of land near the sea and this development will be through PPP,” Patil said.
Similarly, Chhattisgarh is geared up to promote its tourism destinations by developing infrastructure there. “We are one of the youngest states and therefore offer massive investment opportunity in the hospitality and tourism sector. Chhattisgarh is looking at forging partnerships with hoteliers and tour operators and others tourism stakeholders to create new opportunities. Raipur has a new capital called ‘Naya Raipur’ – a brand new city being built from scratch. The city is being built over an area of 25,000 acres. It is the first planned city of the 21st century. We offer all possible help in hand-holding and clearances or any other help required to private players,” S K Mishra, Managing Director, Chhattisgarh Tourism Board, said at SATTE.
West Bengal, which has been on back seat on tourism front, has now become quite aggressive in promoting tourism, and is hence putting a lot of stress on developing infrastructure in the state. “We have identified 11 sites for tourism infrastructure development through the PPP model. Destinations such as Gajoldoba, Jharkhali and Western banks of Hoogly among others are being taken up on a priority basis by the government,” Umapada Chatterjee, Director, Tourism, Government of West Bengal, said and added that that the government has identified 207 acres of land in Gajoldoba in Jaipalguri and 97 acres have been earmarked for tourism infrastructure development in Jharkhali. The state government has chalked out a plan of Rs. 3,490 crores investment in PPP projects to develop tourism-related infrastructure. Moreover, West Bengal government is also strengthening its airport infrastructure.
“The new airport in Durgapur is all set to welcome its maiden flight on 16 April, 2014,” he informed, and added that the government is working on a Master Plan for the conservation of colonial heritage on the western banks of river Hooghly. “Around 116 heritage buildings have been identified for restoration by the government. National Museum of Denmark has expressed interest in conservation of few of the heritage structures already,” he revealed.
‘Global Investors Meet’ woos investments
Interestingly, some of the states in India actively participate in their respective ‘Global Investors Meet’ to woo private investment in the tourism sector. Taking the lead is Gujarat which received as many as 247 approved investment intentions for tourism sector during Vibrant Gujarat Summit 2013, according to the Vibrant Gujarat website. During the 2011 Vibrant Gujarat Summit, the state received about Rs. 20, 83,000 crores investment in infrastructure through 7,936 MoUs.
Karnataka attracted a whooping investment of Rs 35,000 crores for the tourism and hospitality sector during their last Global Investors Meet. It was announced that Hyatt Hotels and Resorts is setting up a five-star hotel in Hampi. Orange County, Somateeram and Windflower are setting up resorts around heritage spots such as Pattadakal, Aihole, Belur, Bijapur, Jog, Mysore and Anekal.
Kerala also witnessed encouraging response from investors for the sector as well for projects such as a star category hotel EduHealth City at Panakkad and a destination boat club at Thirurangadi, Marine and Leisure Island at Dharmadom, water aquarium in Arookkuty Mist Valley Resort and Spa and a Spice Valley Resort in Idukki district, among others. In total, Kerala received responses from 58 companies for its sea plane project. Similarly, Madhya Pradesh Tourism signed nine Memorandums of Understanding (MoU’s) worth Rs. 1,192.96 crores during its last Global Investors Summit in Indore in 2012. Chhattisgarh also received Expressions of Interest from private players for the state’s tourism and hospitality sectors.
Rebuilding tourism in Uttarakhand
Uttarakhand, which faced devastation due to flash flood last year, is putting all its efforts to rebuild and strengthen existing infrastructure in the state. “Uttarakhand has proposed major revival and rebuilding plans to pump in about Rs 5,000 crores in the next three-five years in the infrastructure sector. This offers a plethora of business opportunities to the private players to join the Government in state rebuilding,” Umakant Panwar, Uttarakhand Tourism Secretary, had told T3. Panwar informed that the government is planning to develop Tehri Lake area as international tourist destination. “The project aims to develop Tehri Lake as complete tourist destination with nature, heritage and sustainable modern tourism amenities. Modeled on Italy’s Lake Como, the development will comprise of adventure sports facilities, leisure activities and a township. The work on this project is expected to commence by next year,” he added. The MoT has also sanctioned Rs. 100 crores to rebuild tourism infrastructure in the state.
Developing soft infrastructure
Apart from focusing on physical infrastructure, the MoT is also focused on developing soft infrastructure to support tourism growth. The Ministry has adopted a multipronged strategy which includes strengthening and expanding the institutional infrastructure for training and education. Moreover, the MoT is also pursuing its skill development effort for training over 2.8 lakh people, the Ministry said in a release. The Ministry has already been pursuing ‘Hunar se Rojgar’ programme to reduce the skill gap affecting the hospitality and tourism sector, and to ensure the spread of the economic benefits of tourism to the poor.
The aggressive approach towards creating tourism-related infrastructure by the Central and state governments will solve the infrastructure problem, which is the major hindrance for the India’s tourism growth.
